Employment Practices Liability

Fewer and fewer companies in California have insurance coverage for “wage and hour” claims, i.e. claims for failure to pay overtime, failure to provide meal and rest periods, and failure to provide accurate itemized wage statements. Many times such coverage is prohibitively expensive or simply unavailable.  Accordingly, if a company in California has an Employment Practices Liability policy, it may have a very broad “wage and hour” exclusion.

Even if your policy has such an exclusion, there still may be hope. A recent unpublished decision by the Ninth Circuit in PHP Insurance Services, Inc. v. Greenwich Insurance Company, Case No. 16-15083, is a reminder that a mere allegation of a covered Employment Practices Wrongful Act may trigger a carrier’s duty to defend even if not asserted as a cause of action.  Continue Reading Ninth Circuit Affirms Carrier Had Duty to Defend Employment Class Action

Blog-Image---Wage-and-HourDon’t be too surprised if you see a “wage and hour” exclusion in your employment practices liability insurance policy, especially if you have employees in California. While these exclusions purport to bar coverage for claims brought under laws that govern “wage and hour” practices, lawsuits involving “wage and hour” violations often include alleged violations of other labor-related statutes. This was the scenario presented recently in Hanover Ins. Co. v. Poway Academy of Hair Design, Inc. in which a federal court was asked to decide whether a “wage and hour” exclusion applied to a claim that the insured had failed to reimburse reasonable business expenses in violation of California Labor Code section 2802. Continue Reading Claim for Failure to Reimburse Reasonable Business Expenses Not Barred by EPL Policy’s Wage and Hour Exclusion

Employers continue to face a wave of lawsuits alleging violations of various “wage and hour” statutes (overtime pay, meal and rest breaks, etc.).  Employment liability insurers have uniformly denied coverage for these claims and have tightened applicable exclusions.  Some insurers now offer wage and hour coverage, but these policies and endorsements usually provide only very restricted defense cost coverage.  A new source of coverage now exists, courtesy not of insurers but of revisions to the California Labor Code.

New Labor Code §558.1, effective January 1, 2016, appears to create individual liability for violation of California’s wage and hour statutes.  Continue Reading New Law May Create Coverage for Wage and Hour Claims